Laserfiche WebLink
ELK RIVER MUNICIPAL UTILITIES <br /> ELK RIVER,MINNESOTA <br /> NOTES TO FINANCIAL STATEMENTS <br /> DECEMBER 31,2012 AND 2011 <br /> Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED <br /> Compensated absences <br /> All vacation benefits can be carried over from year to year and will be payable upon termination. Sick leave can be <br /> accumulated to a maximum of 960 hours from year to year.Upon termination or retirement,employees will have 50 <br /> percent of unused sick leave,up to a maximum of 960 hours, converted to cash and deposited into their Post Health <br /> Care Savings account. The liability for vacation and sick pay is reported as a liability in the respective funds at year <br /> end. <br /> Postemployment Benefits Other Than Pensions <br /> Under Minnesota statute 471.61,subdivision 2b.,public employers must allow retirees and their dependents to <br /> continue coverage indefinitely in an employer-sponsored health care plan,under the following conditions: 1) <br /> Retirees must be receiving(or eligible to receive)an annuity from a Minnesota public pension plan,2)Coverage <br /> must continue in group plan until age 65,and retirees must pay no more than the group premium,and 3)Retirees <br /> may obtain dependent coverage immediately before retirement. All premiums are funded on a pay-as-you-go basis. <br /> The liability was actuarially determined,in accordance with GASB Statement 45,at January 1,2011. <br /> Net position <br /> Net position represents the difference between assets and liabilities and deferred inflows. Net position is displayed in <br /> three components: <br /> a. Net investment in capital assets-Consists of capital assets,net of accumulated depreciation reduced by any <br /> outstanding debt attributable to acquire capital assets. <br /> b. Restricted net position-Consists of net position restricted when there are limitations imposed on their use <br /> through external restrictions imposed by creditors,grantors, laws or regulations of other governments. <br /> c. Unrestricted net position- All other net position that do not meet the definition of"restricted"or"net <br /> investment in capital assets". <br /> Comparative data and reclassifications <br /> Comparative total data for the prior year have been presented in the selected sections of the accompanying <br /> financial statements in order to provide an understanding of changes in the Utilities' financial position and <br /> operations. Also,certain amounts presented in the prior year data have been reclassified in order to be consistent <br /> with the current year's presentation. <br /> Deferred outflows of resources <br /> In addition to assets,the statement of financial position will sometimes report a separate section for deferred <br /> outflows of resources. This separate financial statement element,deferred outflows of resources,represents a <br /> consumption of net position that applies to a future period(s)and so will not be recognized as an outflow of <br /> resources(expense/expenditure)until then.The Utility only has one item that qualifies for reporting in this <br /> category. It is the deferred charge on refunding reported in the government-wide statement of net position. A <br /> deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition <br /> price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. <br /> 35 <br />